AerCap, a major Airbus customer with a large, outstanding order book with the European manufacturer, sold seven Airbus A320-200 delivery positions for the net present value (NPV) of future earnings of the aircraft, it was revealed during the company’s investors day 3 April.

The transaction had previously been disclosed in AerCap’s 20F annual filing with the US Securities and Exchange Commission.

The additional detail came forth during the question-and-answer period of the half-day conference. Asked for the details, CEO Klaus Heinemann demurred citing contract confidentiality but he did say the AerCap obtained the NPV of future earnings for the aircraft and residual  as a premium for these positions.

He disclosed that another lessor was involved in the transaction and “ultimately an airline.” Airbus, he said, badly needed the aircraft for a major sales campaign with a flag carrier. Heinemann did not disclose either the lessor or the airline.

AerCap, as CAO reported 4 April, has ambitious growth plans. It plans to double the asset value of its fleet to just under $7bn by the end of 2011. Around 80% of the financing required has already been circled or is in process.

The funding sources are a mix of the following: cash, from normal cash flow and routine portfolio turnover; revolving lines of credit; bank debt and capital markets; and ECA financings.

AerCap’s average cost of funds for 2007 was about 6.7% but projects that this will decline to 5.5% or less in 2008.



Source:'s sister premium news site Commercial Aviation Online

Airbus A320 aircraft profile